If the contract is incredibly important, or if there`s probably confusion about who you are, you can add more details. You can indicate that you are a natural person (and not a company), your middle name, your country of residence and/or your address. For example: whether required or not, a written agreement becomes your proof of what has been agreed and prevents anyone from forgetting or changing the story later. The drafting of the contract also leads the parties to focus on the essential points and reach a final agreement. When attempting to enforce a contract, a person or company must always consider the impact of a dispute on a long-term business relationship between the parties involved. Definitions of grouped parties. Many contracts exist between groups of counterparties. It makes sense to define each part individually (and don`t forget to use the specifically defined term if you`re only referring to that part) and additionally define each part by grouping the individual parts together. For example, in an asset purchase agreement, there are often multiple sellers (and buyers), one for intangible assets (IP), one for each international tax entity, finance companies for shareholder loans, and often the parent company for certain operating assets. Another example can be found in joint venture agreements (or shareholder agreements), where the main holding company is often the main party, while the actual shareholder is a tax-advantaged local entity (or even a shelving company). In these examples, it is recommended to refer to the seller or ABC on the one hand and the buyer or XYZ on the other hand. If you are an affiliate of the group, please note that such processing may also raise issues of joint and several liability for the performance of an affiliate`s obligations.
In many companies, this only raises theoretical questions, but it is always advisable to treat joint and several liability in a separate clause. If there is joint and several liability, this may trigger questions or requests for notification under (the restrictive covenants of) a framework loan or facility agreement of that company. Many contracts contain language that states that only the parties who sign the contract can enforce its terms. No person other than the parties has any rights or remedies. Despite this statement, a court could decide that the term “parties” may include people in addition to those who have signed. Therefore, contracts should explicitly name the parties involved, or at least define the term in such a way that it refers only to those who signed the document. The contracting party is the person or company responsible for all obligations arising from the contract. Thus, if an obligation is not fulfilled, the designated party is the one who is held responsible for it. If it is an individual, that person is personally responsible. If it is a business, the company is liable, but the owners/employees of that company are usually not (with a few exceptions).
You can`t afford to go wrong with this part of your contract. Here`s how to get it right! When defining people, the language of the contract usually uses their surname, without including titles such as Mr. or Mrs. Professors and other professionals are defined by their title, which is abbreviated. Contracts are generally governed by the laws of the State in which the agreement was concluded and are enforced. Depending on the subject matter of the contract (i.e. the sale of property, the rental of immovable property), a contract may be subject to one of two types of State law. The majority of contracts (i.e. employment contracts, leases, general trade agreements) are controlled by customary state law – a tradition-based but ever-changing body of laws promulgated primarily by judges from court decisions over the years. It is not uncommon for contracts to be drawn up between the groups that make up the parties. In such cases, each party should be clearly defined by a specific term, taking care to identify each party that is part of the agreement or an appropriate representative.
Ensuring that this is clearly stated avoids problems in the future, especially in cases where there is joint and several liability. There are several mistakes that are often made in the design of contracts regarding the definitions of the parties that result in less clarity: short name. If possible, use a defined term that matches the business name of the business or is composed of words from the entity`s name. This is preferred to a fancy abbreviation or acronym. However, an acronym is appropriate if the part is known to it, if its name contains that acronym, or if the parties are affiliates (with similar names). .